Contractors' Questions: How to shake off a contract I signed?

Contractor’s Question: In the first week of September, I signed a contract due to begin on October 6th. But I’ve since decided to stay in my current IT job and told the recruitment agency with the contract that I won’t be performing it.

As I have every intention of continuing my current job, and no intention of taking up the freelance contract, the agency are now angrily threatening me with legal action. What can I do to stop these threats or get out of this situation?

Expert’s Answer: The first point to note is that no one can force you to take up the position. If there is a contract it is a contract for personal services and if you are in breach of the contract, the only claim against you can be for compensation for the loss incurred by the other party.

It is possible that two contracts are involved in the opportunity you wish to ignore. You say that you signed a contract. I presume that was with the party for whom you would be doing the work. If that is the case, then it is possible that they would take action against you if they cannot obtain a replacement in time, but I suspect that sort of action would not be worth their while.

As far as the recruitment agency is concerned, did you sign a contract with them? If you did not, then they have no claim against you. If you did sign a contract with them, it will depend entirely on the terms of that contract. Any claim they would have would be for the loss of the commission they would have obtained. But it is important to check the detailed wording of the contract.

I suspect that the threats are designed to pressurise you into taking up the contract. If you did not sign a contract with the agency, I suggest that you inform them that they have no case against you. If you did sign a contract with the agency, your response will very much depend on the terms of that contract and the extent to which you may be liable to pay compensation. In any event, if they find a replacement candidate who takes up the position they will have suffered no loss.

The expert was solicitor Nigel Musgrove, on behalf of Cousins Business Law.

Editor’s Note: Further Reading –

How to escape from a legally binding contract

Beating the IT Contract Crunch ii) broken promises

Contract basics for IT contractors